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Notes to Accounts of Thejo Engineering Ltd.

Mar 31, 2015

1. CORPORATE INFORMATION

Thejo Engineering Limited (formerly known as Thejo Engineering Services Private Limited) (the Company) was incorporated on 26th March, 1986 as a private limited company, with its Registered Office at Aysha Building, No. 41, Whites Road, Royapettah, Chennai - 600 014. The name of the Company was changed to Thejo Engineering Private Limited vide Certificate of Incorporation dated 17th June, 2008. The Company was subsequently converted into a public limited company with consequent change of name as Thejo Engineering Limited vide special resolution passed by the Members at their meeting held on 20th June, 2008. Thejo Engineering Limited made an Initial Public Offer (IPO) of 4,72,800 equity shares of the face value of Rs. 10/- each at a premium of Rs. 392/- per share in September 2012 and the shares got listed on the EMERGE SME platform of NSE. The IPO was fully subscribed, and the Company's shares got listed on the EMERGE SME platform of NSE. The share capital of the Company increased to Rs. 171.68 lakhs in the Financial Year 2012-13. During the year 2013-14, the Company issued Bonus Shares to the existing shareholders in the ratio of 1:1 and the paid-up capital of the Company increased to Rs. 343.36 lakhs.

The Company is an Engineering Solutions provider for Bulk Material Handling, Mineral Processing and Corrosion Protection to the Core Sector Industries like mining, power, steel, cement, ports and fertilizers. The Company's services include belt conveyor installation, maintenance and operations, while its product portfolio covers design, manufacture and supply of engineering products for Bulk Material Handling, Mineral Processing and Corrosion Protection. The Company has opened a Branch in Perth, Australia during the year.

The Company has four overseas subsidiaries namely, Thejo Hatcon Industrial Services Company, Saudi Arabia, Thejo Australia Pty Ltd, Australia, Thejo Brasil Comercio E Servicos Ltda, Brazil and Thejo Engineering Latinoamerica SpA, Chile. Thejo Hatcon Industrial Services Company is primarily engaged in rubber lagging and industrial services. Thejo Australia Pty Ltd is primarily engaged in conveyor splicing, maintenance and related services. Thejo Brasil Comercio E Servicos Ltda and Thejo Engineering Latinoamerica SpA are primarily engaged in sale of products manufactured by the Company.

2. ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

Contingent Liabilities (to the extent not provided for)

Rs. in lakhs

Particulars 2014-15 2013-14

Claims against the company not acknowledged - - as debts

Guarantees issued by the Banks 999.06 1,105.79

Guarantee provided by the Company (for loan availed by

Thejo Australia Pty Ltd) 77.66 -

1,076.72 1,105.79

3.Commitments

Estimated amount of contracts remaining to be executed on capital account: Rs. 236.08 lakhs (Previous Year - Rs. 337.49 lakhs)

4. Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under:

5. Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India and charged to the Profit & Loss Statement for the year.

6. Defined Benefit Scheme

The Company has defined benefit scheme in the form of gratuity to employees.

7. Related Party Disclosures

List of Related Parties

Name of the Party Relationship

Thejo Hatcon Industrial Services Company Subsidiary

Thejo Australia Pty Ltd Subsidiary

Thejo Brasil Comercio E Servicos Ltda Subsidiary

Thejo Engineering LatinoAmerica SpA Subsidiary

Mr. V.A. George Key Management Personnel

Mr. K.J. Joseph Key Management Personnel

Mr. Thomas John Key Management Personnel

Mr. Manoj Joseph Key Management Personnel

Mr. Rajesh John Key Management Personnel

Mr. M.D. Ravikanth Key Management Personnel

Mr. Manesh Joseph Relative of Key Management Personnel

Mrs. Rosamma Joseph Relative of Key Management Personnel

Mrs. Celinamma John Relative of Key Management Personnel

8. Leases

The Company has taken various commercial premises under cancellable leases. These lease agreements are normally renewed on expiry.

The rentals are expensed with reference to the lease terms and conditions.

9. The Company has sent letters for confirmation to debtors, based on materiality. While few parties have confirmed the balance, confirmations from the remaining parties are awaited.

10. Pursuant to the enactment of Companies Act, 2013, effective from 01.04.2014, the Company has adopted the useful life of individual tangible assets as specified below. Consequently, the depreciation for the year ended 31.03.2015 was higher by about ' 89.63 lakhs as compared to the depreciation calculated as per Schedule XIV of the Companies Act, 1956.

11. Residual value:

In respect of Fixed Assets which have completed the useful life, the carrying amount as on 01.04.2014 or 5% of the cost, whichever is lower, is retained as residual value in the books.

The Written-down Value of Tangible Assets whose lives have expired as at 01.04.2014 have been adjusted net-off tax, in the opening balance of Retained Earnings amounting to Rs. 91.71 lakhs.

12. The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

13. As the estimated recoverable amounts of the cash generating assets of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

14. Previous Year Figures

Previous year's figures have been regrouped / reclassified wherever necessary to correspond with the current year's classification / disclosure.


Mar 31, 2014

Note: Closing Cash and Cash Equivalents includes Rs. 241.04 lakhs (Previous Year: Rs. 186.23 lakhs) in Fixed Deposits with Banks held as Margin Money for BG & LC.

Note 2 ADDITIONAL INFORMATION TO FINANCIAL STATEMENTS

Note 2.1 Contingent Liabilities (to the extent not provided for)

2.1.1 Claims against the company not acknowledged as debts - -

2.1.2 Guarantees issued by the Banks 1,105.79 895.69

1,105.79 895.69

Note 2.3 Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under :

2.3.1 Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India and charged to Statement of Profit & Loss for the year.

2.3.2 Defined Benefit Scheme

The Company has defined benefit scheme in the form of gratuity to employees.

Contribution to gratuity is made to Life Insurance Corporation of India through the Gratuity Fund as per the scheme framed by the Corporation. The disclosure under AS -15(Revised) in this regard is given hereunder

Note 2.4 Related Party Disclosures

List of Related Parties

Name of the Party Relationship

Thejo Hatcon Industrial Services Co LLC, KSA Subsidiary

Thejo Australia Pty Limited Subsidiary

Mr. V.A. George Key ManagementPersonnel

Mr. K.J. Joseph Key Management Personnel

Mr. Thomas John Key Management Personnel

Mr. Manoj Joseph Key Management Personnel

Mr. Rajesh John Key Management Personnel

Mr. Manesh Joseph Relative of Key Management Personnel

Mrs. Rosamma Joseph Relative of Key Management Personnel

Mrs. Celinamma John Relative of Key Management Personnel

Note 2.5 Leases

Financial Leases: The company has not taken financial leases.

Operating Leases:

- The Company has taken various commercial premises and items of plant and equipment under cancellable operating leases. These lease agreements are normally renewed on expiry.

- The company has not entered into any non-cancellable leases.

2.5.1 There was a fire accident at the stores of the manufacturing unit at Ponneri on 21st April, 2013 resulting in damage to / destruction of raw material and finished goods. The stocks have been adequately insured with United India Insurance Company and the insurance claim has been settled for a sum of Rs.305.14 lakhs apart from salvage worth Rs.29.44 lakhs being taken by the Company.The insurance Company has made payment to an extent of Rs.250 lakhs as on 31st March, 2014 and the balance amount of Rs.55.14 lakhs has been received in April 2014. There was an ultimate loss of Rs.24.74 lakhs primarily on account of policy excess and the same has been treated as an exceptional item. There was no major disruption in the operations due to the accident.

2.5.2 The Company has sent letters for confirmation of balances from debtors and creditors based on materiality and the age of receivables and payables. While some parties have confirmed the balance, confirmations from the remaining parties are awaited.

2.5.3 The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

2.5.4 As the estimated recoverable amounts of the cash generating assets of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

Note 3 Previous Year Figures

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.


Mar 31, 2013

CORPORATE INFORMATION

Thejo Engineering Limited (formerly known as Thejo Engineering Services Private Limited) (the Company) was incorporated on 26th March, 1986 as a private limited company. The name of the Company was changed to Thejo Engineering Private Limited vide a fresh certificate of incorporation dated 17th June, 2008. The Company was subsequently converted into a public limited company with consequent change of name as Thejo Engineering Limited vide special resolution passed by the Members at their meeting held on 20th June, 2008. Thejo Engineering Ltd made an Initial Public Offer (IPO) of 4,72,800 equity shares of the face value of Rs. 10/- each at a premium of Rs 392/- per share in September 2012 for getting its shares listed on the EMERGE SME platform of NSE. The IPO was fully subscribed and the Company allotted 4,72,800 equity shares of Rs. 10/- each on 12th September, 2012. The shares were listed on 18th September, 2012. Prior to the IPO, the Company had also issued 59,236 equity shares of face value of Rs. 10/- each at a premium of Rs. 327.63/- per share on 27th August, 2012 to SIDBI Venture Capital Ltd A/c India Opportunities Fund on preferential basis. Consequently, the share capital of the Company increased from Rs. 118.47 lakhs to Rs. 171.68 lakhs.

The Registered Office of the Company is situated at Aysha Building, No. 41, Whites Road, Royapettah, Chennai, 600014. The Company is an Engineering Solutions provider for Bulk Material Handling, Mineral Processing and Corrosion Protection to the Core Sector Industries like mining, power, steel, cement, ports, fertilizers etc. The Company''s services include belt conveyor installation, maintenance and operations, while its product portfolio covers design, manufacture and supply of engineering products for Bulk Material Handling, Mineral Processing and Corrosion Protection.

The Company has two overseas subsidiaries outside India namely, Thejo Hatcon Industrial Services LLC, Saudi Arabia and Thejo Australia Pty Limited, Australia. Thejo Hatcon Industrial Services LLC is primarily engaged in rubber lagging and industrial services. Thejo Australia Pty Limited is primarily engaged in conveyor splicing, maintenance and related services.

Note 1.1 Employee Benefits

The Company has accounted for the Long term defined benefits and contribution schemes as under:

A. Defined Contribution Schemes

Contribution to Provident Fund is made monthly to the Provident Fund Authorities. Contribution to Superannuation fund for eligible employees is made by way of premium to Life Insurance Corporation of India and charged to Statement of Profit & Loss for the year.

B. Defined Benefit Scheme

The company has defined benefit scheme in the form of gratuity to employees.

Contribution to gratuity is made to Life Insurance Corporation of India through the Gratuity Fund as per the scheme framed by the Corporation. The disclosure under AS -15(Revised) in this regard is given hereunder:

Note 1.2 Segment Reporting

The Company is primarily engaged in a single segment of activity which encompasses a range of solutions to the maintenance needs of bulk handling equipment, whose risks and rewards do not vary much. However, considering the entry of the company into Saudi Arabian and Australian markets through its subsidiaries focusing on service activities, segment reporting based on manufacturing units and servicing units are presented in both standalone and consolidated accounts.

1.2.2: Subsequent to the Balance Sheet date, there was a fire accident at the stores of the manufacturing unit at Ponneri on 21st April, 2013 resulting in damage to/destruction of raw material and finished goods. The stocks have been adequately insured with United India Insurance Company and insurance claim has been initiated for a sum of Rs.422.02 lakhs (excluding duties and taxes). There is no major disruption in the operations due to the accident.

1.2.3 The Company has sent letters for confirmation of balances from debtors and creditors based on materiality and the age of receivables and payables. While some parties have confirmed the balance, confirmations from the remaining parties are awaited.

1.2.4 The Company has not received any communication from its suppliers claiming that they are micro, small scale or medium enterprises.

1.2.5 As the estimated recoverable amounts of the cash generating assets of the Company are higher than their carrying amount, no impairment of assets has been recognized in the accounts of the Company in line with AS - 28 on Impairment of Assets issued by the Institute of Chartered Accountants of India.

Note 2 Previous Year Figures

Previous year''s figures have been regrouped / reclassified wherever necessary to correspond with the current year''s classification / disclosure.

 
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